Eminent Domain - The Basic Law

Protecting property rights of individuals was a central part of the Founding Father’s goals when creating the United States government and the courts have routinely ruled that due process of law is required before a person can be deprived of either life, liberty or property.

Nevertheless, the State can take your property without your consent under the doctrine of Eminent Domain. Eminent domain is the power possessed by governments to take over the private property of a person without his/her consent. The government can only acquire private lands if it is reasonably shown that the property is to be used for public purpose only. Federal, state, and local governments can seize people’s homes under eminent domain laws as long as the property owner is compensated at fair market value.

This article shall discuss the basic law of eminent domain both in terms of what is required to constitute a taking and what methods are available to contest the taking and receive fair compensation.

The Basic Law:

When a property is acquired by the government, it is called “taking.” Pursuant to the Fifth Amendment of the United States Constitution, government can acquire real and personal belongings of a citizen for public purpose and the person should be provided just compensation. See Dowling v. City of Barberton, 2008 U.S. Dist. LEXIS 73162 (N.D. Ohio Sept. 24, 2008). The Fifth Amendment’s public use clause is applicable to state governments through the Fourteenth Amendment Clause. The taking of property for private purpose is thus unconstitutional.

Eminent domain laws are created by the federal and state legislatures. Courts have the power to judicially review the acquisition of land. However, if there are no arbitrary and unreasonable decisions, courts cannot interfere in the decisions of the legislature. McCabe Petroleum Corp. v. Easement & Right-Of-Way Across Twp. 12 N., 2004 MT 73 (Mont. 2004). Legislatures can also delegate the power of eminent domain to agencies for public purposes.

Property is said to be acquired when government encroaches on the land of a person for public purposes. When a government denies natural use of a person’s property, this amounts to an informal taking of the property. However, the taking should be for a public use and the land owner should be paid a just compensation. Property can be regulated by governments. But if the regulations imposed are so substantial that the person looses his/her natural rights in the property, it is considered a taking and the government is bound to pay compensation. Mich. S. Cent. Power Agency v. Constellation Energy Commodities Group, Inc., 466 F. Supp. 2d 912 (W.D. Mich. 2006).

Eminent domain can only be exercised following the strict rules prescribed in the statutes. The power must be exercised in a constitutional manner. The procedure for acquisition of land should be comply with the rules provided in the statutes by the legislatures. Sanitary & Improvement Dist. No. 1 v. Nebraska Pub. Power Dist., 253 Neb. 917 (Neb. 1998). Statutes conferring and circumscribing the power of eminent domain must be strictly construed.

A condemnor is a party to whom the power of eminent domain is delegated. A condemnor is given broad discretionary power which can be applied only in good faith according to due process of law. Benton v. Ga. Marble Co., 258 Ga. 58 (Ga. 1988).

The advantage of the government exercising the power of eminent domain need not be for the benefit of a large number of people. The use can be for a community of people or residents of an area alone. However, the benefit should not be for one person alone. Legislatures are provided wide discretionary powers to decide whether an action is for public advantage. City of Smithville v. St. Luke’s Northland Hosp. Corp., 972 S.W.2d 416 (Mo. Ct. App. 1998).

Legislatures can exempt certain properties from acquisition in a reasonable manner. Mt. Vernon-Woodberry Cotton Duck Co. v. Ala. Interstate Power Co., 240 U.S. 30 (U.S. 1916). A hospital that is mainly working for charitable purposes may be exempted from land acquisition. This is because a property already devoted to a public use usually cannot be taken for another public use which will totally destroy or materially impair or interfere with the former use. State ex rel. Maryland Heights Fire Protection Dist. v. Campbell, 736 S.W.2d 383 (Mo. 1987).

Pursuant to 42 USCS § 4601, the federal government can provide facilities for a person who needs help to relocate. The Model Eminent Domain Code provides that assistance for relocation must be administered uniformly and in a fair and equitable manner to displaced persons. This law applies to displacements caused by both public and private condemnors.

 

Requirements Imposed by the United States Constitution Due Process Clause:

The eminent domain power is subjected to certain constitutional limits such as:

• The property acquired must be taken for a “public use;”
• The state must pay “just compensation” in exchange for the property;
• No person must be deprived of his/her property without due process of law.

The taking clause of the Fifth Amendment to the U.S. constitution will not prohibit the governmental taking of private property. However, it places a condition on the exercise of that power and the purpose of the taking clause is to prevent the government from forcing some people alone to bear public burdens which must be borne by the public as a whole. Wash. Legal Found. v. Legal Found. of Wash., 271 F.3d 835 (9th Cir. Wash. 2001).

Similarly, the takings clause expressly requires compensation where government takes private property for public use. Note that it does not bar government from interfering with property rights but has to provide a just compensation. The public use requirement is generally viewed as a restriction on the government’s eminent domain power. The government cannot use that power unless its use is for the benefit of the public.

In order to bring a claim under the takings clause, a claimant must identify a property interest recognizable under the Fifth Amendment. It is to be noted that the Fifth Amendment forbids the federal government from taking property for public use without just compensation and this limitation is extended to the states through the Fourteenth Amendment.

However, every destruction or injury to property by government action is not considered as a taking in the constitutional sense. Similarly, diminution of property value alone will not establish a taking. Hawkeye Commodity Promotions, Inc. v. Miller, 432 F. Supp. 2d 822 (N.D. Iowa 2006).

Property owners can enjoy broader protection under a state constitution than under the Federal Constitution but not less protection. State v. Wojtyna, 70 Wn. App. 689 (Wash. Ct. App. 1993).

If a political subdivision with the power of eminent domain damages property for a public use, the property owner can seek damages in an action for tort, in a statutory action for inverse condemnation, or in a constitutional action for inverse condemnation. Inverse condemnation is an action or eminent domain proceeding initiated by a person having an interest in realty rather than by the government condemnor. Lone Star Industries, Inc. v. Secretary of Kansas Dep’t of Transp., 234 Kan. 121 (Kan. 1983).

In addition to the constitutional requirements of public use and just compensation, the due process clause protects a person from the adoption of any form of procedure in eminent domain cases which deprives him/ her of a reasonable opportunity to be heard and to present any objections and claims.

Therefore, in order to succeed in establishing a constitutional violation of the takings clause, claimants must demonstrate that:

• They have a property interest protected by the Fifth Amendment,
• They were deprived of that interest by the government for public use,

 

What is a “Taking?”

A taking occurs when the government encroaches upon or occupies private land for its own proposed use. Even a minimal permanent physical occupation of real property requires compensation under the takings clause. For instance, governmental regulation of property can sometimes constitute a taking. Litva v. Vill. of Richmond, 172 Ohio App. 3d 349 (Ohio Ct. App., Jefferson County 2007).

Generally, takings claims arise two ways:

• Physical taking;
• Regulatory taking.

A physical taking occurs when the government encroaches upon private land for its own proposed use. A regulatory taking can arise although the government actions do not encroach upon or occupy the property but still affect and limit its use to such an extent that a taking occurs. Regulatory takings are based on the principle that while property may be regulated to a certain extent, if a regulation goes too far it will be recognized as a taking. Ganci v. New York City Transit Auth., 420 F. Supp. 2d 190 (S.D.N.Y. 2005).

The takings clause is generally held to apply to two types of governmental action:

• Taking of property by the government’s eminent domain power;
• Taking of property by inverse condemnation.

The power of eminent domain is an inherent sovereign power. The eminent domain power allows the government to take private property for the benefit of the public after paying just compensation. Inverse condemnation occurs when government regulation condemns some or all of the use of the property, diminishing the value to its owners to such an extent that it is as if the government had condemned the property. Pascoag Reservoir & Dam, LLC v. Rhode Island, 217 F. Supp. 2d 206 (D.R.I. 2002).

Inverse condemnation leads to the de facto taking by eminent domain through the state’s power to regulate, whereas a taking by the eminent domain power is an explicit use of the sovereign power. However, not every acquisition of a private property interest by a state constitutes a taking such as the taxing power, the police power, or the power to purchase property. The state may acquire private property interests in a manner that does not constitute a taking. Moreover, when the government acquires such an interest through a power other than its taking power, just compensation is not constitutionally require. Waiste v. State, 10 P.3d 1141 (Alaska 2000). Thus, policing power or zoning powers are normally not considered a taking though the effect on the value of the property may be extreme.

 

Judicial Review of Taking:

The mode and manner of the exercise of the power of eminent domain is exclusively vested in the judgment and discretion of the legislature. Utilities, Inc. v. Washington Suburban Sanitary Comm’n, 362 Md. 37 (Md. 2000). The scrutiny by the courts in appropriation cases is limited in scope but it remains as a critical constitutional component. City of Norwood v. Horney, 110 Ohio St. 3d 353 (Ohio 2006). The court however will not substitute its judgment for a legislature’s judgment as to what constitutes a public use unless the use is palpably without reason.

However, there is a role for courts to play, although a narrow one, in reviewing a legislature’s judgment of what constitutes a public use, even when the eminent domain power is equated with the police power. Deference to the legislature’s public use determination is required until it is shown to involve an impossibility. Hawaii Housing Authority v. Midkiff, 467 U.S. 229 (U.S. 1984).

The courts have normally held that any departure from this judicial restraint can result in courts deciding on what is a governmental function and invalidating legislation on the basis of their view on that question at the moment of decision, a practice which has proved impracticable in other fields. The U.S. Supreme Court has made clear that it will not substitute its judgment for a legislature’s judgment as to what constitutes a public use unless the use be palpably without reasonable foundation. Richardson v. City & County of Honolulu, 124 F.3d 1150 (9th Cir. Haw. 1997).

The power and the obligation of eminent domain plays a critical role in constitutional governance and courts are obligated to carefully monitor its exercise. The exercise of the power of eminent domain is not entirely beyond judicial scrutiny. Under a statute relating to eminent domain, a condemnation defendant may seek judicial review regarding the legality of the proceedings and whether the condemning entity has the legal authority and right to condemn.

It was observed in Twp. of W. Orange v. 769 Assocs., 172 N.J. 564 (N.J. 2002) that a reviewing court has no power to upset a municipality’s decision to use its eminent domain power in the absence of an affirmative showing of fraud, bad faith, or manifest abuse. It was also observed that courts must defer to legislative bodies on questions implicating the state’s sovereign authority.

Although it is narrow in scope, judicial review is not meaningless in eminent domain cases. Defining the parameters of the power of eminent domain is regarded as a judicial function. It was stated in City of Norwood v. Horney, 110 Ohio St. 3d 353 (Ohio 2006) that when the state takes the private property of an individual for transfer to another individual rather than for use by the state itself, then judicial review of the taking is considered to be important.

 

Compensation for Taking of Land:

Often referred to as the Just Compensation Clause, the final clause of the Fifth Amendment provides that private property should not be taken for public use without just compensation. Tahoe-Sierra Pres. Council v. Tahoe Reg’l Planning Agency, 535 U.S. 302 (U.S. 2002). This law applies to the states as well as the federal government.

Accordingly, the Fifth Amendment of the U.S constitution protects private property rights. A government can take private property for a public use only upon payment of just compensation.

In an acquisition, there is a contractual obligation to pay compensation or damages. To exercise the power of eminent domain, a government must prove the four elements set forth in the Fifth Amendment. They are:

• Acquisition is of private property;
• Property must be acquired;
• Acquisition must be for public use; and
• Just compensation must be awarded.

Just compensation is such which puts the injured party in a good condition as s/he would have been, if the injury had not been inflicted. It includes the value of the land, or the amount to which the value of the property from which it is taken has depreciated.

Generally, the property owner is not entitled to compensation before the government takes possession of his/her land. The constitution does not require that compensation be actually paid in advance of the occupancy of the land. However, the owner is entitled to reasonable, certain, and adequate provision for obtaining compensation before his/her occupancy is disturbed. Stringer v. United States, 471 F.2d 381 (5th Cir. Miss. 1973).

In Delaware, L. & W. R. Co. v. Morristown, 276 U.S. 182 (U.S. 1928), the court held that the taking of private property for public use is deemed to be against the common right and authority to do so must be clearly expressed.

Property subject to acquisition includes not only real property but also personal property. Generally, intangible properties like right to business damages do not constitute property in the constitutional sense. Texaco, Inc. v. Department of Transp., 537 So. 2d 92 (Fla. 1989). Easements are property interests subject to the just compensation. Bormann v. Bd. of Supervisors, 584 N.W.2d 309 (Iowa 1998).

Also, patent rights are property protected by the constitutional guarantees. When patent rights are appropriated for public use, adequate compensation must be given. Loss of visibility is compensable where the diminished visibility results from changes on the property taken from the landowner. However, loss of visibility is not compensable where it occurs due to changes on the property of another. Utah DOT v. Ivers, 2005 UT App 519, P23 (Utah Ct. App. 2005).

Similarly, a property occupied by a railroad or other public-service corporation is private property and cannot be taken or entered upon and applied to a different public use except upon payment of compensation.

A riparian right cannot be arbitrarily or capriciously destroyed or impaired, except in accordance with law. If necessary, a riparian right can be taken for the public good upon due compensation.

The acquisition by the public of an easement in land for the construction of a public highway gives no right and easement. When the use is granted by proper authority and does not constitute an additional burden, the owner cannot claim compensation. Lay v. State Rural Electrification Authority, 182 S.C. 32 (S.C. 1936).

The United States exercising power of eminent domain can acquire property in two ways:

• the government can enter into physical possession of property without authority of a court order; or
• the government can institute condemnation proceedings.

In physical seizure, the property owner is provided a remedy under the Tucker Act to recover just compensation. In condemnation proceedings, compensation is given through court.

When a government opts for the physical seizure method, acquisition occurs at the moment of seizure, even though title does not pass until compensation is actually paid. From the beginning of acquisition proceedings, the government’s possession is lawful and an owner’s title represents only his/her claim for compensation.

In an eminent domain proceeding, an interlocutory judgment fixing the compensation payable to a condemnee can be awarded. Such an order has the characteristics of a money judgment in an ordinary civil action.

Just compensation is the full indemnity for the loss or damage sustained by the owner of property taken under the power of eminent domain. Just compensation includes a recovery for all damages, past, present, and prospective. The damages analysis is not limited to the time of the alleged taking.

When property is taken under eminent domain, the measure of just compensation is the fair market value of the property to be ascertained as of the date of taking. It is determined by assessing a price a willing buyer and a willing seller would agree to. Fair market value is that value assigned by parties freely negotiating under normal market conditions based on all surrounding circumstances at the time of the taking. State by Com’r of Transp. v. Hope Road Associates, 266 N.J. Super. 633 (App.Div. 1993).

When a delay in payment occurs, something more than damages is to be awarded. This additional element of compensation is reasonable interest.

 

Rights for Which Compensation Should Be Paid:

In deciding just compensation, a property includes every sort of interest which an owner possesses in the property. Just compensation is such which puts the injured party in as good condition as s/he would have been, if the injury had not been inflicted. It includes the value of the land or the amount which the value of the property depreciated from partial taking. Generally, the property owner is not entitled to compensation before the government takes possession of his land. The constitution does not require that compensation be actually paid in advance of the occupancy of the land. However, the owner is entitled to reasonable, certain, and adequate provision for obtaining compensation before his occupancy is disturbed. Stringer v. United States, 471 F.2d 381 (5th Cir. Miss. 1973).

In eminent domain proceedings, property includes personal property. Generally intangible properties, like the right to business damages do not constitute property in the constitutional sense[iv]. Easements are constitutionally recognizable property interests ie., easements are property interests subject to just compensation. Additionally, patent rights are property protected by the constitutional guarantees. When patent rights are appropriated for public use, adequate compensation must be given.

Generally, property already devoted to a public use cannot be taken for another public use. The reason is that such an acquisition will totally destroy or interfere with the former use. However, when the intention of the legislature is evidenced in express terms or by necessary implication, the government can acquire such property. Palm Bay v. General Development Utilities, Inc., 201 So. 2d 912, 915 (Fla. Dist. Ct. App. 4th Dist. 1967).

Moreover, a property occupied by a railroad or other public-service corporation is private property and cannot be taken or entered upon and applied to a different public use except upon payment of compensation.

A property owner whose property abuts a lake, river, or stream possesses certain riparian rights associated with ownership of such a property. Riparian rights are special rights pertaining to the use of water in a waterway adjoining the owner’s property. Moreover, a riparian owner has certain riparian rights incident to the ownership of real estate bordering upon a navigable stream. In eminent domain, a riparian right is a property right and is valuable. A riparian right cannot be arbitrarily or capriciously destroyed or impaired, except in accordance with law. If necessary, a riparian right can be taken for the public good upon due compensation. Thiesen v. Gulf, F. & A. R. Co., 75 Fla. 28, 77 (Fla. 1917).

An abutting owner’s rights to light, air, view, ingress and egress are property rights and cannot be interfered with or appropriated without just compensation. An owner of property abutting a public highway possesses the right to use of the highway in common with other members of the public. S/he has a private right or easement for the purpose of ingress and egress to and from his/her property. This right cannot be taken away or destroyed or substantially impaired without compensation. The acquisition by the public of an easement in land for the construction of a public highway gives no right and easement.

Methods of Payment:

In an eminent domain proceeding, an interlocutory judgment fixing the compensation payable to a condemnee can be awarded. Such an order has the characteristics of a money judgment in an ordinary civil action. Additionally, the order bears interest from date of entry. Bellflower City School Dist. v. Skaggs, 52 Cal. 2d 278 (Cal. 1959).

Due process does not require condemnation of land in advance of its occupation by the condemning authority.

Moreover, in a condemnation proceedings, an owner must be given opportunity to be heard and to offer evidence as to the value of the land taken. Barker v. Lannert, 310 Ky. 843, 850 (Ky. 1949).

The Taking Act (40 U.S.C. § 258a.) requires the United States to deposit with the court just compensation for the land taken. However, the estimated compensation is not evidence of the value of the property taken. Moreover, the estimate deposited by the government does not establish a minimum award to which the landowner is entitled. United States v. 75.13 Acres of Land, 693 F.2d 813, 817 (8th Cir. Iowa 1982); 40 USCS § 258a.

Substituted condemnation occurs when property is condemned for exchange with another public utility and the property is used for a public purpose. This is considered a valid exercise of the condemnor’s power of eminent domain. Moreover, substituted compensation can be used to minimize damages to be paid to condemnees. Department of Transp. v. Livaditis, 129 Ga. App. 358, 364 (Ga. Ct. App. 1973).

A plaintiff can abandon eminent domain proceedings at any time after filing the complaint. An appropriating agency can obtain the right to take and use the property during condemnation proceedings upon payment of the amount of the award assessed and upon making sufficient security. The quick take provision enables a condemnor to take possession of property before there has been a full condemnation proceeding ending in judgment. By opting for a quick take possession, the United States government can obtain title by filing a declaration of taking and paying the estimated compensation for the property to the court for the use of the property owner. 40 USCS § 3114.

 

Measure of Compensation:

The Fifth Amendment of the U.S constitution protects private property rights. A government can take private property for a public use upon payment of just compensation. In acquisition, there is a contractual obligation to pay compensation or damages. To exercise the power of eminent domain, a government must prove four elements set forth in the Fifth Amendment. They are:

• Acquisition is of private property;
• Property must be acquired;
• Acquisition must be for public use; and
• Just compensation must be awarded.

Property subject to acquisition includes not only real property but also personal property. Public uses for which the government exercises its power of eminent domain include such things as schools, roads, libraries, police stations and fire stations. Just compensation is the full indemnity for the loss or damage sustained by the owner of property taken under the power of eminent domain. The measure used is fair market value at the time of acquisition. When property is taken under eminent domain, the measure of just compensation is the fair market value of the property to be ascertained as of the date of taking. Just compensation includes a recovery for all damages, past, present, and prospective. The damages analysis is not limited to the time of the alleged taking.

It is important to note that the burden of proving damage is upon the owners of the land taken. United States v. Smith, 355 F.2d 807, 809 (5th Cir. Ala. 1966). The measure of damages is the fair market value of the property as of the date of taking. It is determined by assessing what a willing buyer and a willing seller would agree to negotiate. Fair market value is that value assigned by parties freely negotiating under normal market conditions based on all surrounding circumstances at the time of the taking.

However, the landowner is to be compensated for the fair market value of his property upon the basis of the property’s highest and best use. United States v. 1291.83 Acres of Land, 411 F.2d 1081, 1084 (6th Cir. Ky. 1969). Just compensation includes all elements of value that are inherent in the property. However, it does not exceed market value fairly determined.

The sum required to be paid to the owner does not depend upon the uses to which s/he has devoted his/her land. The sum is to be arrived at on just consideration of all the uses for which the land is suitable. The highest and most profitable use for which the property is used and needed or likely to be needed in the reasonably near future is to be considered. United States v. 1291.83 Acres of Land, 411 F.2d 1081 (6th Cir. Ky. 1969).

Where land is appropriated for a temporary use, the measure of compensation is what the property is worth for the time when it is taken. The measure of damages for a temporary taking of property for a public purpose is the rental value of such property during the period when it is taken. United States v. 883.89 Acres of Land, 314 F. Supp. 238, 242 (W.D. Ark. 1970).

Where only part of property is taken, best measure of compensation is a combination of the fair market value of the part taken, together with the decrease in the fair market value of the untaken part measured immediately before and immediately after the taking. Arkansas Louisiana Gas Co. v. James, 15 Ark. App. 184, 188 (Ark. Ct. App. 1985).

When the property value is reduced because of alterations after acquisition and before the condemnation action is heard, the condemnee is entitled to a higher value as of the time of the taking. However, a condemnee is not entitled to the higher value when the land value increases after the taking and before the condemnation action. State Highway Comm’r v. Jones, 27 N.J. 257 (N.J. 1958).

Factors to be considered in determining the highest and best use of property are:

• market demand;
• proximity to areas already developed in a compatible manner with the intended use;
• economic development in the area;
• specific plans of businesses and individuals;
• actions already taken to develop land for that use;
• scarcity of land available for that use;
• negotiations with buyers interested in property taken for the particular use;
• absence of offers to buy property made by buyers who have put it to the use urged; and
• the use to which the property is being put at the time of the taking.

See Exxon Pipeline Co. v. Hill, 788 So. 2d 1154 (La. May 15, 2001).

When a delay in payment occurs, something more than fair market value is to be awarded. This additional element of compensation is termed reasonable interest. Just compensation in the constitutional sense is fair market value at the time of taking plus interest from that date to the date of payment. United States v. 278.59 Acres of Land, 364 F.2d 63, 65 (5th Cir. Fla. 1966).

California Law on Eminent Domain:

California eminent domain laws can be found in Title 7 of Code of Civil Procedure. Eminent domain is the power of local, state or federal government agencies to take private property for public use so long as the government pays just compensation. Pursuant to Cal Code Civ Proc § 1230.030 private property shall be taken by eminent domain only when there is a public use. Examples of “public uses” for which the government might exercise its power of eminent domain include such things as schools, roads, libraries, police stations, fire stations and similar public uses.

Pursuant to Cal Code Civ Proc § 1245.220 the government agency must adopt a formal resolution, also known as resolution of necessity to acquire the property before commencing an eminent domain proceeding in court. Cal Code Civ Proc § 1245.230. The resolution of necessity must be adopted at a public hearing. It must be adopted before the condemning agency can commence an eminent domain action in court.

In order to adopt a resolution of necessity, the government agency must find (1) that the project for which the property is to be acquired is necessary; (2) that the property is necessary for the public project; (3) that the project is located in such a manner as to offer the greatest public benefit with the least private detriment; and (4) that an offer to purchase the property has been made.

Pursuant to Cal Gov Code § 7267, government agencies shall obtain an appraisal and make an offer to the owner of record of real property to be acquired before the agency may commence court proceedings. The offer generally must be in an amount no less than the appraisal approved by the agency.

A property owner is not required to accept the condemning agency’s offer. Instead, the property owner may make a counter-offer, or may assert a higher value for his or her property once the eminent domain action is filed in court. The court directs the government agency to deposit the probable amount of just compensation. Thereafter, appraisers determine the fair market value of the subject property. The fair market value of the property taken is the highest price on the date of valuation that would be agreed to by the seller, who would be willing to sell under no particular or urgent necessity of doing so, nor obliged to sell, and a buyer, being ready, willing and able to buy under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available.

If settlement cannot be reached between the owner and the government agency, trial regarding the eminent domain action takes place before a jury who determines fair market value of the subject property. When the judgment is entered, the government pays compensation within 30 days following entry of judgment and the title to subject property is transferred to the government by the court.

Pursuant to Cal Code Civ Proc § 1255.410, the condemning agency may ask the court for possession of the property even before judgment has been entered in the eminent domain proceeding. The court may only do so, however, if the condemning agency has first deposited into the County or State Treasury the amount which it determines as the probable compensation to be paid for the property. Once the condemning agency deposits the amount of probable compensation, the property owner or tenant may apply to the court to withdraw that portion of the deposit which represents the owner’s probable amount of compensation.

 

Inverse Condemnation:

Inverse condemnation is a remedy available to a property owner who is not fairly compensated for the property taken from him/her by a government for a public use. Usually a property of a land owner is taken by a condemnation proceeding, in which government is the plaintiff and the property owner is the defendant. When a governmental action causes injury to a property owner and s/he is not properly compensated, s/he can sue the government. In such cases, the status of the parties is reversed and hence, the action is termed inverse condemnation.

Usually, inverse condemnation occurs in three situations:

• Physical seizure of land;
• Reduction in value of the property making it not useful for any purpose, by a regulation of the government; and
• When the government unreasonably insists to convey the property as a condition for issuance of a permit.

The taking of the property by a government can be physical or regulatory. A few examples of physical taking are: seizure of land, retention of possession of land after the lapse of lease period, and deprivation of access to land. Buchanan v. United states, 1981 U.S. Ct. Cl. LEXIS 1538 (Ct. Cl. Dec. 10, 1981).

To allow an action on inverse condemnation, a governmental authority needs to occupy or damage the subject property. Willis v. Univ. of N. Ala., 826 So. 2d 118, 121 (Ala. 2002). When a government regulation regarding a property is so stringent that it makes the property not usable for any purpose and thus deprives an owner of any benefits of owning that property, inverse condemnation arises. If the purpose of the regulation and its economic effect on the property amounts to a taking of the property, the owner is entitled to compensation. Southview Assoc., Ltd. v. Bongartz, 980 F.2d 84, 93 (2d Cir. Vt. 1992).

Note that a government regulation amounts to a taking or damaging of property, when thereis denial of building or demolition permits, burdensome conditions placed on development of the property, and the property is subjected to overly restrictive zoning regulations.

In order to test whether a regulation has amounted to a taking of a property, there are three factors to look at. This test is known as the Penn Central test. The three factors considered are:

• the nature of the government regulation,
• the impact of the regulation on the property and
• the extent of interference on the land owner’s economic expectations of the property.

An ordinance of zoning does not represent a taking of property for public use merely because it diminishes the value of the regulated property. Governmental regulation amounts to a taking for public use only when it takes away from the owner all or substantially all reasonable uses of the property. Wild Rice River Estates, Inc. v. City of Fargo, 2005 ND 193 (N.D. 2005). A mere reduction in the market value of the property cannot be the basis for a claim of inverse condemnation. Braunagel v. City of Devils Lake, 2001 ND 118 (N.D. 2001). The evaluation of a regulation has to be done considering its impact on the land owner’s whole parcel of land. Appolo Fuels, Inc. v. United States, 2002 U.S. Claims LEXIS 384 (Fed. Cl. Dec. 18, 2002).

Remedies Generally Available:

Generally, the rule is that private property shall not be taken or damaged without paying just compensation to the land owner. However, an aggrieved land owner can file an action directly against the state or the authority vested with condemnation power. The general rule of getting consent for moving a suit against a state is not required where taking of the property has been done by a state against constitutional mandate. A landowner is entitled to file suit for implementing his/her constitutional right to compensation against an illegal taking of the property. McLaughlin v. Town of Front Royal, 1994 U.S. App. LEXIS 6454 (4th Cir. Va. Apr. 5, 1994).

As discussed above, an owner can file a suit when a regulation has gone to the extent of denying all productive and economical use of land. When a government entity having the power of condemnation damages property for a public use, the property owner may file for damages either as a statutory action or as a constitutional action for inverse condemnation. The remedy of inverse condemnation is the manner in which a landowner may recover just compensation for a taking of the owner’s property when condemnation proceedings have not been instituted. Iowa Coal Mining Co. v. Monroe County, 555 N.W.2d 418 (Iowa 1996). When a regulation of a government with regard to property is so onerous that it makes a property not usable for any constructive purposes, it will amount to a taking of property and the owner will be entitled to compensation. Southview Assoc., Ltd. v. Bongartz, 980 F.2d 84, 93 (2d Cir. Vt. 1992).

If the statutory remedy is not sufficient to compensate the damage to the land owner, the land owner may move for a common law action. A landowner has the burden to prove that the statutory remedy is inadequate. Only after exhausting the statutory remedy or administrative remedy can a land owner move for an action claiming inadequate compensation under common law. Molo Oil Co. v. City of Dubuque, 692 N.W.2d 686 (Iowa 2005). A statutory remedy does not prevent adopting common law remedies against a non-sovereign entity vested with condemnation power unless otherwise provided in a statute.

Due process requires that there must be a hearing at some stage of the condemnation proceeding. When a property owner is given the right to appear in defense of his/her rights in a proceeding, the state will also be given a right to be heard on its contention that there is no taking of the lands of a property owner. State by Peterson v. Anderson, 220 Minn. 139 (Minn. 1945). The doctrine of separation of powers and due process law demands that judicial review of administrative decisions be available in condemnation proceedings.

A landowner may move for an injunction in an illegal taking of property. It is a proper way to challenge the unlawful taking of property. Illinois Cities Water Co. v. Mt. Vernon, 11 Ill. 2d 547 (Ill. 1957).

An action for ejectment is considered proper in certain cases. A land should be taken by following proper condemnation proceedings and mandatory constitutional provisions. A land owner may recover land by moving for ejectment proceedings. Note, however, that where a partial taking of a property is made lawfully for the beneficial use of the public, an action for trespass cannot be brought by the land owner.

When an issue relating to condemnation arises, a court may grant temporary or mandatory injunction given the circumstances to maintain status quo. Even though an injunction is denied, the proceedings would continue to assess the extent of damages. A motion for injunction may be denied if it causes hardship to the public in general and great loss to the government. Greenville v. State Highway Com., 196 N.C. 226 (N.C. 1928).

Additionally, the remedy of Mandamus is also available to a land owner against the condemnation authority in order to ascertain the damages caused to the property and the compensation entitled to the land owners. Proctor v. Thieken, 2004 Ohio 7281 (Ohio Ct. App., Lawrence County Dec. 17, 2004).

Also, a writ of prohibition may be the proper procedure to use in challenging a proposed order of condemnation It can also be used in cases relating to jurisdiction of a court in an eminent domain proceeding. Domiano v. Department of Envtl. Resources, 713 A.2d 713 (Pa. Commw. Ct. 1998).

A state or a department cannot be held for the wrongful or unauthorized acts of its officials. For the state or department to be held liable, it should be proven that an official was authorized to do such an act or that act had been sanctioned by the state or concerned department. United States v. Archer, 241 U.S. 119 (U.S. 1916).

Under certain jurisdictions, governmental immunity is available from liability for negligent torts. In spite of this immunity, recovery may be made where a governmental project is maintained negligently so as to constitute a nuisance causing damage to private property. Recovery of the value of property which has been taken by a governmental entity is possible even otherwise, other than through eminent domain procedures. Robinson v. Ashdown, 301 Ark. 226, 1990 Ark. LEXIS 41.

The Tucker Act waives certain immunities available to the government in certain law suits. A landowner may initiate an action under the Tucker Act for compensation when the government illegally takes land not included in its document of taking or takes more land than it has paid compensation. Houser v. United States, 12 Cl. Ct. 454 (Cl. Ct. 1987).

The doctrine of estoppel and waiver are available as defenses against a land owner. A land owner who has accepted compensation is estopped from challenging the condemnation proceeding. A landowner’s participation in the whole proceedings will waive any procedural defects in the condemnation proceedings.

The remedies available have to be initiated within the period of limitation provided in the statutes. A proceeding initiated after the period of limitation is not entertained by the courts. The limitation period varies with the nature of the motions moved. A claim will accrue when the affected party knew or should have known of the injury which is the basis of the action. Duke St. Ltd. Pshp. v. Board of County Comm’rs, 112 Md. App. 37 (Md. Ct. Spec. App. 1996).

The general rules of evidence are applicable in the condemnation or inverse condemnation proceedings. Burden of proof is on the land owner to prove damages to his/her property. A land owner may be awarded a sum as a cost or fee whenever a court judgment is rendered in his/her favor.

 

Conclusion:

A wise old attorney once told this writer that suing the government was the closest thing to self immolation. “They use your tax dollars to pay lawyers to beat you down. They’re using your own money to crush you.” He was speaking of fighting tax audits but the theory is normally sound.

But one area that the average citizen can “take on” the government and has a good chance of prevailing is condemnation. Note that a jury trial can often be available and the average citizen is quite conscious of the need to fairly compensate people who suffer the deprivations caused by governmental action. It is a Constitutional right to be fairly compensated and few governments want to be seen as ogres taking property unfairly.

That said, as with every fight in our legal system, be sure to carefully consider the cost benefit aspects of the litigation and make sure you have set aside a war chest sufficient to demonstrate to the authorities that you fully intend to protect your own rights. Be realistic, be fair, but also be determined. Relief is often available.